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8-K - FORM 8-K - Bridgeline Digital, Inc.blin20131210_8k.htm

 

Exhibit 99.1

 

 The Digital Engagement Company

 

 

FOR IMMEDIATE RELEASE

 

 

Bridgeline Digital Announces Fourth Quarter and Fiscal 2013 Financial Results

 

Fourth Quarter 2013 Subscription and Perpetual License Revenue Increased 117% and Fiscal 2013 Subscription and Perpetual License Revenue Increased 60%

 

Fourth Quarter 2013 Recurring Revenues Increased 36%

 

Burlington, Mass., December 10, 2013 - Bridgeline Digital, Inc. (NASDAQ: BLIN), The Digital Engagement Company™, today announced financial results for its fourth quarter and fiscal year ended September 30, 2013.

 

“We continue to ardently focus on building a highly scalable iAPPS business as thousands of quality customers rely on iAPPS for their mission critical website, intranets, and web stores.” said Thomas Massie, Bridgeline Digital’s President and Chief Executive Officer. “Fiscal 2014 will be an inflection year as our legacy revenue becomes an insignificant part of our total revenue and our core business continues to grow rapidly.”

 

Fourth Quarter Highlights:

 

 

Revenue from our core business, iAPPS and the ElementsLocal platform, increased 30% to $5.8 million in the fourth quarter of 2013, compared to $4.5 million in the fourth quarter of 2012.

 

 

Revenue for the fourth quarter of 2013 was $6.7 million, compared to $6.7 million in the fourth quarter of 2012.

 

 

Subscription and perpetual license revenue increased 117% to $1.3 million in the fourth quarter of 2013, compared to $0.6 million in the fourth quarter of 2012.

 

 

Recurring revenue increased 36% in the fourth quarter to $1.5 million, compared to $1.1 million the fourth quarter of 2012.

 

 

76 iAPPS enterprise licenses and 63 iAPPS ds licenses were sold in the fourth quarter of 2013.

 

 

Cash generated from operations in the fourth quarter of 2013 was $300,000.

 

 

Fiscal 2013 Highlights:

 

 

Revenue from our core business, iAPPS and ElementsLocal related revenue, increased 16%, to $19.2 million in fiscal 2013 compared to $16.6 million in fiscal 2012.

 

 

Subscription and perpetual license revenue increased 60% to $4 million in fiscal 2013, compared to $2.5 million in fiscal 2012.

 

 

Recurring revenue increased 21% in fiscal 2013 to $5.1 million, compared to $4.2 million in fiscal 2012.

 

 

Achieved record new bookings of iAPPS related bookings of $21.4 million in fiscal 2013.

 

 
 

 

 

 

250 iAPPS enterprise licenses and 2,223 iAPPS ds licenses were sold in fiscal 2013. A total of 945 iAPPS enterprise licenses have been sold and a total of 2,223 iAPPS ds licenses have been sold since iAPPS was launched in 2008. iAPPS has an 84% retention rate.

 

 

In fiscal 2013 the Company made significant capital investments and improvements into the iAPPS co-managed Network Operations Center to support the planned scale of potentially driving tens of thousands of iAPPS driven websites, micro-sites or web stores.

 

 

In August, Bridgeline Digital acquired franchise web platform developer ElementsLocal, who has over 3,200 franchises on their web platform.

 

 

Bridgeline Digital was honored with 26 various industry related awards for iAPPS driven websites or web stores.

 

 

Fiscal 2014 Outlook 

 

“For fiscal 2014, revenue is expected to be approximately $28 million, an increase from $24.5 million in 2013. I expect we will generate positive Adjusted EBITDA for the fiscal year. Further, in fiscal 2014 our revenue projection includes a projected increase of the Company’s core business of approximately 32% from fiscal 2013 and a reduction of non-iAPPS related legacy revenue of approximately $2.5 million. Fiscal 2014 will validate the type of growth company we are” said Thomas Massie, President and CEO of the Company.

 

 

Conference Call Information

 

Bridgeline Digital will host a conference call to discuss fourth quarter and fiscal 2013 results at 4:30 p.m. ET today. To listen to the conference call, please dial (877) 837-3910 within the U.S. or (973) 796-5077 for international callers.

 

 

Non-GAAP Financial Measures

 

This press release contains the following non-GAAP financial measures: non-GAAP adjusted net income, non-GAAP adjusted earnings per diluted share, Adjusted EBITDA and Adjusted EBITDA per diluted share.

 

Non-GAAP adjusted net income and non-GAAP adjusted earnings per diluted share are calculated as net income or net income per share on a diluted basis, excluding, where applicable, amortization of intangible assets, stock-based compensation and the related tax effects.

 

Adjusted EBITDA and Adjusted EBITDA per diluted share are defined as earnings before interest, taxes, depreciation and amortization and stock-based compensation charges. Bridgeline uses non-GAAP adjusted net income and Adjusted EBITDA as supplemental measures of our performance that are not required by, or presented in accordance with, accounting principles generally accepted in the United States (“GAAP”).

 

Bridgeline’s management does not consider these non-GAAP measures in isolation or as an alternative to financial measures determined in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude significant expenses and income that are required by GAAP to be recorded in the Company's financial statements. In addition, they are subject to inherent limitations as they reflect the exercise of judgments by management about which expenses and income are excluded or included in determining these non-GAAP financial measures. In order to compensate for these limitations, Bridgeline management presents non-GAAP financial measures in connection with GAAP results. Bridgeline urges investors to review the reconciliation of its non-GAAP financial measures to the comparable GAAP financial measures, which is included in this press release, and not to rely on any single financial measure to evaluate Bridgeline's financial performance.

 

Our definitions of non-GAAP adjusted net income and Adjusted EBITDA may differ from and therefore may not be comparable with similarly titled measures used by other companies, thereby limiting their usefulness as comparative measures. As a result of the limitations that non-GAAP adjusted net income and Adjusted EBITDA have as an analytical tool, investors should not consider them in isolation, or as a substitute for analysis of our operating results as reported under GAAP.

 

 
 

 

 

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

 

All statements included in this press release, other than statements or characterizations of historical fact, are forward-looking statements. These forward-looking statements are based on our current expectations, estimates and projections about our industry, management's beliefs, and certain assumptions made by us, all of which are subject to change. Forward-looking statements can often be identified by words such as "anticipates," "expects," "intends," "plans," "predicts," "believes," "seeks," "estimates," "may," "will," "should," "would," "could," "potential," "continue," "ongoing," or similar expressions, and variations or negatives of these words. These forward-looking statements are not guarantees of future results and are subject to risks, uncertainties and assumptions, including, but not limited to, the impact of the weakness in the U.S. and international economies on our business, our inability to manage our future growth effectively or profitably, fluctuations in our revenue and quarterly results, our license renewal rate, the impact of competition and our ability to maintain margins or market share, the limited market for our common stock, the volatility of the market price of our common stock, the performance of our products, our ability to respond to rapidly evolving technology and customer requirements, our ability to protect our proprietary technology, the security of our software, our dependence on our management team and key personnel, our ability to hire and retain future key personnel, or our ability to maintain an effective system of internal controls as well as other risks described in our filings with the Securities and Exchange Commission. Any of such risks could cause our actual results to differ materially and adversely from those expressed in any forward-looking statement. We expressly disclaim any obligation to update any forward-looking statement.

 

About Bridgeline Digital

 

Bridgeline Digital, The Digital Engagement Company™, enables its customers to maximize the performance of their mission critical websites, intranets, and online stores. Bridgeline’s iAPPS® web engagement platform deeply integrates Content Management, eCommerce, eMarketing, Social Media management, and Web Analytics to help marketers deliver online experiences that attract, engage and convert their customers across all digital channels. Bridgeline provides end-to-end Digital Engagement solutions and boasts an award-winning team of interactive services professionals. Headquartered in Burlington, Mass, with nine additional locations throughout the United States and a .NET development center in Bangalore, India. Bridgeline has thousands of quality customers that range from small and medium-sized organizations to Fortune 1000 companies. To learn more, please visit www.bridgeline.com or call (800) 603-9936.

 

Contact:

 

Bridgeline Digital, Inc.

Michael Prinn

Executive Vice President

& Chief Financial Officer

781.497.3016

mprinn@blinedigital.com

 

 
 

 

 

BRIDGELINE DIGITAL, INC.

RECONCILIATION OF GAAP TO NON-GAAP RESULTS

(Dollars in thousands, except per share data)

 

     

Three Months Ended

   

Twelve Months Ended

 
     

September 30,

   

September 30,

 
     

2013

   

2012

   

2013

   

2012

 

Reconciliation of GAAP net loss to

                               

non-GAAP adjusted net income:

                               
 

GAAP net loss

  $ (705 )   $ (40 )   $ (3,598 )   $ (946 )
 

Amortization of intangible assets

    120       179       511       750  
 

Impairment of intangible asset

    -       -       -       281  
 

Stock-based compensation

    103       129       438       386  
 

Non-GAAP adjusted net income(loss)

  $ (482 )   $ 268     $ (2,649 )   $ 471  
                                   

Reconciliation of GAAP loss per diluted share to

                               

non-GAAP adjusted earnings per diluted share:

                               
 

GAAP net loss per share

  $ (0.04 )   $ (0.00 )   $ (0.23 )   $ (0.07 )
 

Amortization of intangible assets

    0.01       0.01       0.03       0.06  
 

Impairment of intangible asset

    -       -       -       0.02  
 

Stock-based compensation

    0.01       0.01       0.03       0.03  
 

Non-GAAP adjusted net income(loss)

  $ (0.02 )   $ 0.02     $ (0.17 )   $ 0.04  
                                   

Reconciliation of GAAP net loss to Adjusted EBITDA:

                               
 

GAAP net loss

  $ (705 )   $ (40 )   $ (3,598 )   $ (946 )
 

Provision for income tax

    61       (21 )     171       68  
 

Interest expense (income),net

    79       42       273       276  
 

Amortization of intangible assets

    120       179       511       750  
 

Impairment of intangible asset

    -       -       -       281  
 

Depreciation

    344       254       1,179       979  
 

EBITDA

    (101 )     414       (1,464 )     1,408  
 

Other amortization

    113       40       314       170  
 

Stock-based compensation

    103       129       438       386  
 

Adjusted EBITDA

  $ 115     $ 583     $ (712 )   $ 1,964  
                                   

Reconciliation of GAAP net loss per diluted share to

                               

Adjusted EBITDA per diluted share:

                               
 

GAAP net loss per share

  $ (0.04 )   $ (0.00 )   $ (0.23 )   $ (0.07 )
 

Provision for income tax

    -       -       0.01       0.01  
 

Interest expense (income),net

    -       -       0.02       0.02  
 

Amortization of intangible assets

    0.01       0.01       0.03       0.06  
 

Impairment of intangible asset

    -       -       -       0.02  
 

Depreciation

    0.02       0.02       0.07       0.07  
 

Other amortization

    0.01       -       0.02       0.01  
 

Stock-based compensation

    -       0.01       0.03       0.03  
 

Adjusted EBITDA

  $ 0.00     $ 0.04     $ (0.05 )   $ 0.15  

 

 
 

 

 

BRIDGELINE DIGITAL, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(Dollars in thousands, except share and per share data)

(Unaudited)

                                     
       

Three Months Ended

   

Twelve Months Ended

 
       

September 30,

   

September 30,

 
       

2013

   

2012

   

2013

   

2012

 

Revenue:

                               
 

Digital engagement services

  $ 4,971     $ 5,464     $ 18,585     $ 21,268  
 

Managed service hosting

    466       659       1,921       2,517  
 

Subscription and perpetual licenses

    1,274       613       4,000       2,511  
   

Total revenue

    6,711       6,736       24,506       26,296  
                                     

Cost of revenue:

                               
 

Digital engagement services

    2,548       2,712       10,114       10,949  
 

Managed service hosting

    93       83       317       372  
 

Subscription and perpetual licenses

    338       114       1,107       450  
   

Total cost of revenue

    2,979       2,909       11,538       11,771  
   

Gross profit

    3,732       3,827       12,968       14,525  
                                     

Operating expenses:

                               
 

Sales and marketing

    2,326       2,203       8,593       7,730  
 

General and administrative

    1,034       1,007       4,474       3,931  
 

Research and development

    473       203       1,365       1,456  
 

Depreciation and amortization

    464       433       1,690       1,729  
 

Impairment of intangible asset

    -       -       -       281  
   

Total operating expenses

    4,297       3,846       16,122       15,127  

Loss from operations

    (565 )     (19 )     (3,154 )     (602 )
 

Interest income (expense), net

    (79 )     (42 )     (273 )     (276 )

Loss before income taxes

    (644 )     (61 )     (3,427 )     (878 )
 

Provision for income taxes

    61       (21 )     171       68  

Net loss

  $ (705 )   $ (40 )   $ (3,598 )   $ (946 )
                                     

Net loss per share:

                               
 

Basic and diluted

  $ (0.04 )   $ (0.00 )   $ (0.23 )   $ (0.07 )

Number of weighted average shares:

                               
 

Basic and diluted

    17,525,722       14,706,869       15,558,244       13,084,095  

 

 
 

 

 

BRIDGELINE DIGITAL, INC.

CONSOLIDATED BALANCE SHEETS

(Dollars in thousands, except share and per share data)

(Unaudited)

 

       

September 30,

   

September 30,

 
       

2013

   

2012

 

ASSETS

               
                 

Current Assets:

               
 

Cash and cash equivalents

  $ 2,830     $ 2,126  
 

Accounts receivable and unbilled revenues, net

    3,194       3,977  
 

Prepaid expenses and other current assets

    963       648  
   

Total current assets

    6,987       6,751  

Equipment and improvements, net

    3,065       2,735  

Intangible assets, net

    1,517       1,527  

Goodwill

    23,777       21,545  

Other assets

    1,631       1,132  
   

Total assets

  $ 36,977     $ 33,690  
                     
LIABILITIES AND STOCKHOLDERS' EQUITY                
                     

Current liabilities:

               
 

Accounts payable

  $ 1,746     $ 1,132  
 

Accrued liabilities

    1,093       1,306  
 

Accrued earnouts, current

    561       375  
 

Debt, current

    1,165       1,424  
 

Capital lease obligations, current

    397       230  
 

Deferred revenue

    1,960       1,042  
   

Total current liabilities

    6,922       5,509  

Accrued earnouts, net of current portion

    950       990  

Debt, net of current portion

    4,725       2,988  

Capital lease obligations, net of current portion

    544       127  

Other long term liabilities

    1,088       1,106  
   

Total liabilities

  $ 14,229     $ 10,720  
                     

Commitments and contingencies

               
                     

Stockholders' equity:

               
 

Preferred stock - $0.001 par value; 1,000,000 shares authorized;

               
 

none issued and outstanding

    -       -  
 

Common stock - $0.001 par value; 30,000,000 shares authorized;

               
 

18,294,761 and 15,203,538 shares issued and outstanding, respectively

    18       15  
 

Additional paid-in-capital

    44,206       40,847  
 

Accumulated deficit

    (21,314 )     (17,716 )
 

Accumulated other comprehensive loss

    (162 )     (176 )
   

Total stockholders' equity

    22,748       22,970  
   

Total liabilities and stockholders' equity

  $ 36,977     $ 33,690